Energy access crowdfunding and P2P lending grew fourfold in two years, new report finds

Energy 4 Impact launched their final paper in a series of five reports from its Crowd Power programme on energy access related crowdfunding and peer-to-peer (P2P) lending in sub-Saharan Africa and Asia.

The report looks at the market growth since the programme began in 2015 and finds that energy access companies and non-profits raised $14 million in funding on donation, reward, debt and equity platforms in 2017. This represents a fourfold increase in volume of funds raised by energy access campaigns from 2015.

The most significant growth has been in working capital debt raised by off-grid energy companies via lending platforms such as TRINE (Sweden), bettervest (Germany), Energise Africa (UK) and Lendahand (The Netherlands).

The volume of funds raised by energy access campaigns grew 4X from 2015 to 2017.

Powering the Crowd into the Futureprovides a summary of the six campaign archetypes – across the donation, reward, debt and equity landscape – used by energy-access companies and non-profits, to crowd-source finance. It profiles six energy access companies, which have leveraged crowd-sourced finance, including Solaris Offgrid (Tanzania),Simusolar (Uganda) and Azuri Technologies (DRC, Kenya, Rwanda), and one non-profit organisation, Tahude Foundation (Tanzania).

Crowd Power was an experimental programme designed to test whether grants by public agencies can accelerate the impact of crowdfunding and P2P lending platforms on energy access. The report examines the four interventions employed during Crowd Power: match funding, lump-sum payments, first-loss guarantees, and gift vouchers (issued to ‘the crowd’). The research shows the effectiveness of each of these interventions varies across the campaign archetypes. For example, first-loss guarantees are more effective on debt platforms, while match funding is more effective on donation platforms.

First-loss guarantees are more effective on debt platforms, while match funding is more effective on donation platforms.

The report also announces the launch of a second phase of the programme,Crowd Power 2 (CP2). CP2 will provide co-funding to companies raising seed capital on donation, reward and equity crowdfunding platforms, and support the growth of P2P lending platforms by helping them to set-up guarantee and local currency lending facilities.

Crowd Power began in 2015 to test the effectiveness of crowdfunding and P2P lending in addressing the financing gaps faced by off-grid energy companies.